THE RELATIONSHIP BETWEEN INNOVATION AND EMPLOYMENT: FRAGILE FIVE COUNTRIES

Abstract

Many countries are turning to innovation in order to exist in the world economy, to dominate this market and to increase their income. Innovation has a very important place in the realization of economic growth and employment increase in countries. The advancement of technology and the facilitation of communication in the information age create a global environment. This globalizing environment also affects occupational groups, working methods and employment structure. In this respect, the effect of globalization and rapidly developing technological changes on employment is another important phenomenon that has become the subject of research. Technological innovations affect employment in two main ways. The first of these is that a change in a product will generally have a positive effect on the demand for that product and the market share of that product and therefore the employees in the firm will increase. The second is that the new technology will change the cost structure, and the productivity achieved in the product will reduce the demand for labor. The aim of this study is to reveal which view is valid on the effect of innovation on employment for the fragile five countries. As a result of the panel regression analysis, it was determined that there is a statistically significant positive relationship between the R&D expenditures/GDP variable, which is an innovation indicator and employment.